Georgia: a better environment for rural SMEs

Entrepreneurial ecosystems
Since 2021, Swisscontact has been working in Georgia on behalf of the Swiss Agency for Development and Cooperation (SDC) to strengthen the resilience of small and medium enterprises (SMEs) in rural areas. The “Rural SME Development Project” aims to bring about changes that will improve SME financial and management skills, among other objectives. Especially people from socially disadvantaged populations will benefit from these services. Joni Nachkebia’s story is a case in point for this important development in Georgia.

The verdant landscape surrounding the village in Guria region in western Georgia offers excellent conditions for tea plantations, an industry that goes back to Soviet times and beyond. It is here that Joni Nachkebia, a 58-year-old tea grower, embarked on an unusual path to expand his rural family business – with support provided by the Rural SME Development Project.

Joni Nachkebia, tea producer
Tea processing machine

In early 2023, Joni obtained a grant worth 13,000 Swiss francs from the Enterprise Georgia government agency. This substantial financial support allowed him to invest in a state-of-the-art tea processing machine, by which he increased his business’s tea processing efficiency and quality.

Support in the complex process of obtaining finance

Due to health problems, Joni belongs to a group denoted by the Georgian government as “socially vulnerable”, or SVG. Approximately one third of this group’s members is still able to work, like Joni. However, it is particularly challenging for them to obtain state assistance to develop a business. Joni faced obstacles such as unfamiliarity with the online application procedure, difficulties articulating his business ideas, and lack of awareness of available funding sources.

Enterprise Georgia, a state institution promoting private sector development in Georgia, manages the programme to support micro- and small enterprises and issues grants to co-finance equipment purchases. Swisscontact has begun a partnership with Enterprise Georgia and provided technical support, thanks to which the programme obtained a clearer direction and now focuses more specifically on disadvantaged groups, including ethnic and linguistic minorities or people such as Joni.

Thanks to advice and the provision of important and timely information that helped Joni to apply for a grant for his tea production, his knowledge and self-confidence were enhanced. In the end, he managed to navigate through the complex financing process. First of all, he successfully installed the tea processing machine and increased his business’s efficiency.

This improvement required harvesting additional amounts of tea more quickly. To meet the increased demand, Joni invested in his community by hiring 20 more women from his region as part-time labour. Joni’s success not only secured these people’s livelihoods, but it also helped the local economy and fostered the community’s financial stability and self-determination.

A project to create a better business environment for rural small and medium-sized (SME) enterprises in Georgia

The project in Georgia tested and institutionalised communications and support mechanisms that are customized to socially vulnerable groups (SVGs), facilitating their collaboration with public agencies.

A pilot project implemented with Enterprise Georgia in 2022 revealed that potential applicants from SVGs who obtained additional advisory support increased their chances of success by 13% over those applicants not receiving any support. Consequently, after a review of applications submitted by these specific groups, additional points were awarded for their social status, even if they needed to apply for funding like everyone else. The purpose of this easement was to encourage them and give them a small starting advantage in their application.  

In 2023, the advisory services between Enterprise Georgia and the State Employment Support Agency (SESA) were made official. SESA expanded its advisory services to reach over 400 SVG applicants (58% of whom are women). On the whole, participation of people from socially vulnerable groups has grown from just 14 applications in 2020 to 96 in 2022 and an impressive 131 so far in 2023.

Sustainable agriculture, Trade, Entrepreneurial ecosystems
Creating a better business environment for rural small and medium-sized (SME) enterprises in Georgia
The Rural SME Development project aims at creating a better business environment for rural SMEs and entrepreneurs in Georgia.